Designing Democracies for Sustainability

Hans Gersbach and Tobias Kleinschmidt

No 4623, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Democratic processes may not take the welfare of future generations sufficiently into account and thus may not achieve sustainability. We show that the dual democratic mechanism ? rejection/support rewards (RSRs) for politicians and elections ? can achieve sustainability. RSRs stipulate that incumbents who are not re-elected, but obtain the majority support among young voters receive a particular monetary or non-monetary reward. Such rejection/support rewards induce politicians to undertake long-term beneficial policies, but may invite excessive reward-seeking. We identify optimal RSRs under different informational circumstances.

Keywords: Q56; Democracy; Elections; Incentive contracts; Sustainability; Rejection/support rewards (search for similar items in EconPapers)
JEL-codes: D72 D82 H55 (search for similar items in EconPapers)
Date: 2004-09
New Economics Papers: this item is included in nep-cdm, nep-env and nep-pol
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Citations: View citations in EconPapers (3)

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